U.S. to Allow Mexican Trucks Pilot Program Resolves Nafta Issue but Upsets Teamsters, Lawmakers
By ROBERT GUY MATTHEWS

February 24, 2007; Page A3

WASHINGTON -- Following a decade of dispute, the U.S. will open its
highways to Mexican cargo trucks, in a move that could alter the economics
of the domestic trucking industry and is already uniting some American
lawmakers, unions and trucking companies to oppose the change.

The Transportation Department on Friday said it is starting a pilot
program that could begin as soon as April that will allow 100 Mexican
trucking companies unfettered access to U.S. roads. Under the program, both
drivers and trucks must first pass certain safety checks designed and
overseen by U.S. officials in Mexico. The program could eventually be
expanded to include additional Mexican trucking firms.

If the trial succeeds, the U.S. trucking industry could change drastically.
Mexican drivers are paid one-third to 40% less than their U.S. counterparts,
who make an average of about $40,000 a year. An influx of Mexican truckers
would be a boon for U.S. businesses with production lines in Mexico, by
decreasing costs and delays from the current need to shift U.S.-bound goods
at the border to American trucks from Mexican ones. According to the Census
Bureau, the U.S. imported $198 billion of goods from Mexico in 2006.

Some trucking companies in the U.S. vowed to block the move, which they say
will hurt them. The opposition comes against a backdrop of rising
protectionist sentiments that helped propel Democrats to take back Congress
in November and increasingly is coloring trade-policy debates in Washington.

The issue of whether to allow Mexican freight trucks on U.S. roads has been
controversial for more than a decade. Under the North American Free Trade
Agreement, ratified by Congress in 1993, the U.S. and Mexico were supposed
to open their roads to each other's trucks, at least partially, as part of a
broader push to strengthen bilateral economic and trade ties. But the
trucking agreement was put on hold in 1995 after U.S. trucker unions and
other opponents lobbied lawmakers to block such a move. They argued that
Mexican trucks were unsafe, caused pollution and would facilitate illegal
immigration.

Implementation of the agreement ran up against other barriers, including
Congress's imposition in 2001 of a set of safety requirements that had to be
met before the U.S. could open the border to Mexican trucks. In June 2004,
the Supreme Court ruled that the president had the power to decide whether
Mexican trucks could enter the country, but it took three years for the U.S.
and Mexico to reach an agreement, signed Thursday, that will allow U.S.
officials to conduct safety inspections in Mexico. It will also allow U.S.
trucks in Mexico, though that isn't usually cost-effective.

Andrew J. Gillespie, director of transportation for Ansell Healthcare
Products LLC in New Jersey, said the new open-roads policy means his
business won't lose time and money when transporting work-glove materials
from Mexico to New Jersey for final assembly. "We have been waiting years
and years for this change."

Currently, businesses shipping goods to the U.S. from Mexico must use three
drivers and three tractors to move freight. Under the pilot program, Mexican
trucks will be able to go directly to their destinations in the U.S.

The American Trucking Associations, the country's largest trucking-industry
group and a representative of some U.S. trucking companies that operate out
of Mexico, voiced support for the pilot program. It said the program would
improve efficiency and reduce pollution from idled trucks.
[Open Road]

But some past opponents of opening up vowed to continue to fight the move.
"We are on this thing, and we are going to be contacting members of
Congress, because we are very concerned about highway safety," said Jim
Hoffa, president of the Teamsters union, which represents many truckers.
"There is such political pressure to do things to save money for big
corporations."

Todd Spencer, executive vice president of the Owner-Operator Independent
Drivers Association, which represents mostly small-business truckers in the
U.S., said his group would also fight the policy, which he expects will
cause companies with divisions in Mexico to use more Mexican trucks to lower
labor costs. "We are going to raise this as a safety issue, because this is
a problem for us," he said.

Sen. Patty Murray (D., Wash.), head of the Senate Appropriations Committee's
transportation subcommittee, said she will hold a hearing on March 8 to make
sure safety regulations will be met.

Rep. James Oberstar (D., Minn.), chairman of the House Transportation
Committee, has opposed allowing Mexican trucks into the U.S. on the grounds
that they aren't as safe as U.S. vehicles. He questioned whether the
Transportation Department had the necessary systems in place to safeguard
Americans on the road.

"The U.S. is obligated to live up to its commitments under the North
American Free Trade Agreement, but not at the expense of the safety of our
citizens," he said. "We cannot afford to pursue policies that represent a
step backward in terms of safety."

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